Understand and critique the assumptions underlying Markov multiple state models for long-term insurance benefits.
Free SOA Exam ALTAM (Advanced Long-Term Actuarial Mathematics) lesson in Survival Models for Contingent Cash Flows. 10 min read, ~1,549 words.
Markov property: future transitions depend only on current state and age, not on duration in state or path taken. Transition intensities exist, are finite, depend on age and current state only, and are the building block of multi-state pricing. States are exhaustive and mutually exclusive; the life is in exactly...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- 1c
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